Correlation Between Cleanaway and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Cleanaway and Sunny Friend at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cleanaway and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Co and Sunny Friend Environmental, you can compare the effects of market volatilities on Cleanaway and Sunny Friend and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cleanaway with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway and Sunny Friend.
Diversification Opportunities for Cleanaway and Sunny Friend
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cleanaway and Sunny is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Co and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ and Cleanaway is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cleanaway Co are associated (or correlated) with Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Cleanaway i.e., Cleanaway and Sunny Friend go up and down completely randomly.
Pair Corralation between Cleanaway and Sunny Friend
Assuming the 90 days trading horizon Cleanaway Co is expected to generate 0.17 times more return on investment than Sunny Friend. However, Cleanaway Co is 6.04 times less risky than Sunny Friend. It trades about -0.12 of its potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.1 per unit of risk. If you would invest 18,250 in Cleanaway Co on August 28, 2024 and sell it today you would lose (150.00) from holding Cleanaway Co or give up 0.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cleanaway Co vs. Sunny Friend Environmental
Performance |
| Timeline |
| Cleanaway |
| Sunny Friend Environ |
Cleanaway and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cleanaway and Sunny Friend
The main advantage of trading using opposite Cleanaway and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway position performs unexpectedly, Sunny Friend can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sunny Friend will offset losses from the drop in Sunny Friend's long position.| Cleanaway vs. Sunny Friend Environmental | Cleanaway vs. Taiwan Secom Co | Cleanaway vs. TTET Union Corp | Cleanaway vs. ECOVE Environment Corp |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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